January 25, 2012

The new year is well under way, and many resolutions to exercise more, lose weight, and save money have already fallen by the wayside. What shouldn't have fallen by the wayside is your resolve to maintain a cost-effective safety program that keeps your employees safe.

One of the big line items in your safety budget is workers' compensation. Here are some tips for choosing a workers' compensation insurer that both fits your needs and will help you control your costs.

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1. Make sure you're not paying too much: Letting your workers' compensation program run on autopilot can cost your company a lot of money. You need to actively manage your workers' compensation--that includes not only reviewing your injury cases but also periodically reviewing what your insurer provides and at what cost. Check your costs by occasionally soliciting quotes from your insurer and its competitors.
2. Be realistic about whether you'll use the "free" services: Workers' compensation insurers often offer extras (for example, no- or low-cost training materials, on-staff experts, or monitoring equipment for loan) that are free. But nothing is ever truly free--you're paying for the extras somewhere in the premium.
   
   When evaluating quotes, look at the extras with a critical eye to determine whether they are worthwhile for you. If you will never use these services, they really have no value, and you shouldn't "buy" them by paying more.
3. Choose an insurer with experience: If you're considering a switch in insurers (or insuring for the first time), ask how much experience the insurer has in your specific industry. Experience in the industry helps the insurer better manage claims because it knows which types of injuries are typical and what is reasonable with respect to return to work.
4. Talk to other customers: Ask your prospective insurer for references. You want to know how responsive the insurer will be to your calls, how well it will communicate with you (this is especially important in difficult cases--will it keep you filled in on the details and engage you as part of the claims team, or will it treat you as an outsider who only gets minimal information?), and whether it handles claims effectively (does it actively work to contain costs on the claim, or simply let it meander its way through the workers' compensation system, intervening only after it's turned into a monster?).
   
   You also want to know how the insurer will treat your employees during the claims process. An insurer that is overly aggressive and not empathetic may alienate employees. This can put you in a referee type of situation and make the claims process time-consuming and difficult to manage.

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